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LAGUNA BEACH, CA-Buyer Emerald Financial LLC of Los Angeles has paid $12.85 million for the 24-unit Coast Inn and plans to convert the beachfront property into 12 suites, according to Marcus & Millichap. Scott Hook of the Newport Beach office of Marcus & Millichap reports that Emerald Financial bought the inn from a partnership of local investors.Hook, who brokered the sale on behalf of the sellers and also secured the buyer, says that the property, at 1401 S. Coast Hwy., offers “exceptional development potential” for the new owners. He notes that the class A+ location, fronting the Pacific Ocean, features a full restaurant and bar.The Coast Inn was built in 1924 and features ocean views from all of its rooms, many of which include balconies. The new owners have submitted plans to convert the existing rooms to a 12-suite complex with a spa and game room. The new suites will be flexible in design to accommodate families and extended stay guests, according to Hook.The sales price for the Coast Inn works out to more than $535,000 per room, indicating not only the premium being paid for beachfront properties but also the rising prices per room that hotels and motels are selling for in Orange County and the rest of the state. The Coast Inn price far exceeds the average price per room for all hotel and motel sales in the county, which is running in the range of approximately $80,000 to $90,000 according to recent surveys.Those averages include hotels and motels of all classes, however, many of which are inland properties without the amenities or the ocean view of the Coast Inn. In addition, industry sources point out that coastal land like that on which the inn is built is virtually impossible to obtain today and entitlements can be extremely difficult to secure.

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